Report Finds Funding Gap Wide and Persistent

In October, 2004, The Education Trust issued a report entitled "The Funding Gap 2004: Many States Still Shortchange Low-Income and Minority Students." This report, which follows an Education Trust study on the same topic that was released in 2002, quantifies the state-by-state spending differences between districts with distinct socioeconomic characteristics. The report finds that about 70% of states spend less money on their high-poverty districts than on their low-poverty districts, especially when the higher costs of education in low-poverty districts is taken into account. The study also considers the funding gap between high- and low-minority school districts, and provides recommendations for closing these gaps.

Trends in Spending
The study measures school funding by considering the amount of funding received by each district during 2001-2002 from both state and local sources. The numbers also take into account the number of special education students being educated by each district and the geographic differences in the cost of education. The report uses several tables to compare each state's average spending in its wealthiest districts (those with the fewest students living below the poverty line) and its poorest districts (those with the most students living below the poverty line). Those tables that break the numbers down into per-pupil spending levels have incorporated a standard 40% increased cost of educating low-income students. In 36 states, high-poverty districts had less funding per-pupil than low-poverty districts, with the largest gaps found in New York and Illinois.

In a similar analysis, the report shows that 35 states fund those districts with a high concentration of minorities at lower levels than those with a low concentration of minorities. This analysis also adjusted numbers to account for the extra cost of educating low-income students, but made no adjustment related to the minority status of students. The largest funding gaps are in Wyoming, Montana, and New York. States in which the funding gap between high- and low-minority districts was much greater than that between high- and low-poverty districts include California, Kansas, Colorado, Nebraska, Texas, and Wisconsin.

The report also compares these figures to education spending by state in 1997 and 2001 and calculates the net change in funding levels. In 22 states, the gap grew over this time period; the report attributes this negative trend primarily to the recession, which caused state funding to decrease and reliance on local property taxes to increase. The result was that high-wealth districts tapped into their own resources, while low-wealth districts could not. Encouragingly, 27 states managed to buck this trend, lowering the funding disparity between high- and low-wealth districts. The study credits some states with making real progress, notably New Jersey, Connecticut, Georgia, Minnesota, New Mexico, and Ohio.

The report found an aggregate per-pupil disparity between high- and low-poverty districts of $1,348, or $38,700 per year in a classroom of 25 students. This figure is $140 greater than the gap that was reported in 2002.

Closing the Gap
The report concludes with extensive recommendations aimed at closing the funding gap that currently plagues schools in the U.S. The report's authors implore states to decrease reliance on local property taxes, to demand that state funds are channeled directly to the neediest students, to ensure parity within school districts, and to simply give schools more money than they do currently. This final request is also directed at the federal government, which currently privileges high-wealth states over low-wealth states in distributing funds.

Finally, the report underlines the importance of adequate resources to ensuring that students reach the accountability benchmarks that have been set for them. Only by combining education reform efforts with improved school funding will it be possible to close the achievement gap that so often accompanies gaps in funding.

Prepared by Nelly Ward, October 12, 2004